New York City mayor issues demand letter to SAIC, wants back all money paid for fraud-tainted program

by Ben Vernia | July 11th, 2011

On June 29, New York City Mayor Michael Bloomberg sent a letter to the CEO of the government consulting firm SAIC, demanding the repayment of $600 million charged to the city for a payroll and timekeeping system called CityTime.

On June 20, Southern District of New York U.S. Attorney Preet Bharara announced a superseding indictment of eight individuals and one company (Technodyne, LLC), along with the June 14 guilty plea of an SAIC manager. According to the SDNY’s press release:

As alleged in the Indictment, from 2003 to 2010, there existed a massive and elaborate scheme to defraud the City in connection with CityTime. The individuals primarily responsible for the project collaborated in an effort to overbill and otherwise defraud the City by exploiting their authority and influence over OPA, the primary contractor (SAIC), the primary subcontractor (TECHNODYNE), and the sub-subcontractors (DAS and Prime View). As a result, virtually all of the $600 million that the City paid to SAIC for CityTime was tainted, directly or indirectly, by fraud.

New York is one of a handful of municipalites (along with Chicago and Philadelphia) which have a false claims ordinance on their books.

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